Divorce payments might count when applying for a mortgage

Many people wonder about how alimony and child support payments are treated when they’re applying for a mortgage.

Generally, if you’re legally obligated to pay alimony or child support, you have to tell the lender, and the lender will treat these as debts that reduce your available income.

So it would seem logical that if you’re receiving alimony or child support, these should be considered credits that increase your available income. However, it doesn’t always work that way.

Many lenders will treat alimony and child support as income, but they all have their own rules, and it varies from lender to lender.

For instance, if you apply for an FHA loan, you must prove that any divorce payments you receive are required by law (as opposed to informal, voluntary support payments). You must also show that you’ve actually received the payments on time for six months prior to the loan, and that your ex is obligated to continue paying for at least three years after the loan.

If the divorce payments amount to more than 30% of your income, you must prove that you’ve actually received the payments on time for a full year prior to the loan.

Again, other lenders have other rules, so it’s good to do your homework.